FAIR WORK ACT REVIEW
Submission by BHP Billiton
17 February 2012
Introduction
1.
This submission is made by BHP Billiton Limited.
2.
BHP Billiton welcomes the review of the Fair Work Act 2009 at this time. It will ensure that the
Government is in a position to assess how the Act is operating, identify unintended consequences
that have arisen in practice and rectify flaws. BHP Billiton has had substantial exposure to the
operation of the Act. It is pleased to share its experiences with the Review Panel and to recommend
possible solutions to problems encountered.
3.
BHP Billiton aims to develop direct relationships with all employees based on trust and mutual
benefit. In order to achieve this outcome, industrial relations management is devolved to relevant
businesses.
4.
Five key principles underpin BHP Billiton’s industrial relations philosophy. These are:
5.

Efficient and productive workplaces – achieved through industrial relationships that allow for a
culture of continuous improvement and ready acceptance of change;

Direct employee engagement and alignment with the success of the business – pivotal to which
are open and honest employee communications, involvement and personal development;

Mutually beneficial industrial arrangements – whereby competitive remuneration and attractive
conditions of employment are, wherever possible, aligned with the key drivers of operational
success;

Management’s retention of the ultimate responsibility and right to run the business – with
employee consultation not elevated to a right of veto over operational decision-making; and

Respect for an employee’s unequivocal right to have the representative of his or her choice –
whether that be an eligible union or otherwise.
These principles are reasonable and should be able to be realised under the Fair Work Act and
associated legislation.
Structure of submission
6.
The submission is presented in two ways:
(a)
In Part 1 – General Submission, it deals with issues arising under the following headings:

BHP Billiton in Australia (paragraphs 7 to 11);
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
(b)

Bargaining and agreement-making (paragraphs 12 to 57);

Protected industrial action (paragraphs 58 to 80);

Right of entry (paragraphs 81 to 87);

Adverse action (paragraphs 88 to 89);

Redundancy and redeployment (paragraphs 90 to 91); and

Conclusion (paragraphs 92 to 94).
Page 2
In Part 2 – Responses to Questions, it responds to some of the specific questions and
issues raised in Attachment B to the Fair Work Act Review Background Paper.
PART 1 – GENERAL SUBMISSION
BHP Billiton in Australia
7.
BHP Billiton is a leading global resources company. Its purpose is to create long-term shareholder
value through the discovery, acquisition, development and marketing of natural resources. BHP
Billiton pursues this purpose through a strategy to own and operate large, long-life, low-cost,
expandable, upstream assets diversified by commodity, geography and market. It continues to
invest in the future and has a deep inventory of growth assets. BHP Billiton’s company values,
articulated in its Charter, are as follows:

Sustainability – Putting health and safety first, being environmentally responsible and supporting
our communities.

Integrity – Doing what is right and doing what we say we will do.

Respect – Embracing openness, trust, teamwork, diversity and relationships that are mutually
beneficial.

Performance – Achieving superior business results by stretching our capabilities.

Simplicity – Focusing our efforts on the things that matter most.

Accountability – Defining and accepting responsibility and delivering on our commitments.
8.
BHP Billiton is a major participant in processes governed by the Fair Work Act. It directly employs
approximately 23,000 employees in Australia. In addition, approximately 34,000 contractor
employees are engaged in BHP Billiton operations in Australia. The effective operation of the Fair
Work system is therefore critical to BHP Billiton's business.
9.
The BHP Billiton customer sector groups with operations in Australia are:
(a)
Aluminium – Worsley alumina refinery and Boddington bauxite mine in Western Australia;
(b)
Base Metals – Cannington silver, lead and zinc mine in northwest Queensland;
(c)
Energy Coal – Mt Arthur coal mine in the Hunter Valley, New South Wales;
(d)
Iron Ore – integrated iron ore mines and port operations in the Pilbara region of Western
Australia;
(e)
Manganese – GEMCO mining and processing operations on Groote Eylandt, Northern
Territory and TEMCO smelting operations in Tasmania;
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(f)
Metallurgical Coal – coal mines and port operations in the Bowen Basin, Queensland, and
coal mines and port operations in the Illawarra region of New South Wales;
(g)
Petroleum – offshore oil and gas operations in Bass Strait, Victoria and Western Australia;
(h)
Stainless Steel Materials – Nickel West underground and open pit mines, smelter,
concentrators and refinery operations in Western Australia; and
(i)
Uranium – Olympic Dam in South Australia.
10.
Attachment A to this submission is a map showing the location of the various BHP Billiton
Australian offices and operations.
11.
BHP Billiton is also a major participant in the construction industry as principal. Attachment B to
this submission is an extract from BHP Billiton's Exploration and Development Report for the quarter
ended 31 December 2011 showing a list of growth projects in Australia, each of which will be a major
construction project.
Bargaining and agreement-making
Agreement content
12.
The Fair Work Act departs from the approach of confining collective agreements (or awards) to
matters which pertain to the employment relationship. It ignores the longstanding industrial law
jurisprudence about avoiding interference with managerial decision making. These were important
limitations which have stood the test of time in the Australian industrial relations experience. They
should be reinstated.
13.
BHP Billiton contends that the legitimate sphere of enterprise agreements is entitlements for
employees in respect of their wages and their conditions of employment. Some of the claims now
being pressed on it supported by protected industrial action would, if acceded to, impede productivity
and ordinary operational decision making, accountability for which is delegated to management by
the Board on behalf of shareholders. The claims seek benefits beyond what is reasonable or
necessary for the protection of employees.
14.
Claims currently advanced against BHP Billiton in its Bowen Basin coal mines include:
(a)
Refusal to accept disciplinary actions arising from the Company’s Code of Business Conduct
or Workplace Policy;
(b)
Limitations on the use of supplementary labour, such as temporary employees, without
union agreement;
(c)
Contractors and labour hire workers to be paid the same as Company employees;
(d)
Restrictions on employee coverage of staff positions;
(e)
Re-introduction of demarcations with staff employees;
(f)
Inability of the Company to suspend an employee on full pay during an investigation;
(g)
Employees to be given absolute preference for training over staff or contractors;
(h)
Greater restrictions on management's ability to interview employees for disciplinary or
safety-related reasons;
(i)
Union right of entry at any time;
(j)
Union attendance at induction sessions for all new employees;
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(k)
Unlimited paid time off for delegates to deal with member issues including additional paid
time off work (or time off in lieu) for reasonable consultation, preparation, dispute resolution
or negotiations;
(l)
A right for multiple (not single) union delegates to represent an employee;
(m)
Time off for paid monthly union meetings and paid preparation time for union delegates
convening the monthly meetings;
(n)
Time off for paid monthly union committee meetings and union annual general meetings,
where applicable;
(o)
Payroll deductions for union fees;
(p)
Union noticeboards;
(q)
Union Returning Officers to be able to conduct on site union elections;
(r)
Delegates to have unlimited use of mobile phones on site to conduct union business
(notwithstanding safety considerations).
15.
In BHP Billiton's Endeavour Coal business in the Illawarra, one of the union claims seriously pressed
is that the terms of the standard contract for prospective staff employees be in a form agreed to by
the union and not be changed without the union's agreement.
16.
These various claims go beyond what should reasonably be included in an enterprise agreement. A
union pursuing these claims should not have access to protected action in support of them.
17.
To bring about a better balance, there needs to be a legislative adjustment in two ways:
(a)
attention to what are permitted matters and non-permitted matters for enterprise bargaining;
and
(b)
attention to the status of provisions within enterprise agreements which impinge upon
managerial decision making following the expiry of such agreements.
18.
The "permitted matters" in section 172 and the "unlawful terms" in section 194 of the Act should be
adjusted so that only matters pertaining to the employment relationship (and ancillary matters) are
the subject of enterprise agreements. The expression "unlawful terms" would be better re-cast as
"non-permitted matters". Permitted matters should not include items which pertain instead to the
relations between an employer and a union or between an employee and a union.
19.
Protected industrial action should not be available in support of any non-permitted matters such as:
20.
(a)
Use of and terms relating to contractors;
(b)
Demarcations between employees and between employees and staff;
(c)
Preference for unionists;
(d)
Mandatory renegotiation of agreements;
(e)
Bargaining fees;
(f)
Strike pay.
Many current agreements impinge upon management decision making. Even where they deal with
matters pertaining to the employment relationship, which is a legitimate sphere, they can become a
burden upon ordinary operational decision making if they continue indefinitely. If, after the nominal
expiry date of an enterprise agreement, reasonable efforts to reach a new agreement have failed, it
must be open to an employer upon appropriate notice unilaterally to terminate the agreement. Such
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
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a termination need not affect base conditions such as wages but should facilitate, following
appropriate consultation, removal of blockages to decisions where operational change is needed.
This will provide a reasonable balance between the need for parties to honour their agreements
about matters pertaining to the employment relationship with the responsibility of management to get
on with ordinary operational decision making.
Individual flexibility arrangements
21.
The Fair Work Act makes mandatory the inclusion of a flexibility term in an enterprise agreement.
This provision was intended to help achieve the objects of the Act directed towards flexibility for
businesses and individuals while maintaining fair standards. The Fair Work Regulations contain in
Schedule 2.2 a model flexibility term illustrating what the Federal Government and Parliament had in
mind for inclusion in agreements. Fair Work Australia conducted a full arbitration on the appropriate
content of a similar flexibility provision in the context of modern awards.
22.
Unions routinely insist upon limitation of the flexibility terms to a narrow list of trivial subjects. This
has made a mockery of the legislative intention. For example, in current enterprise bargaining in the
coal mining industry in the Bowen Basin, the unions are pressing upon BHP Billiton, backed by
protected industrial action, a claim that limits such individual flexibility under an enterprise agreement
to a few specified matters about the taking of annual leave, sick leave and parental leave.
23.
The utility of these arrangements is being further undermined by unions insisting that certain matters
requiring collective management be the subject of an individual flexibility arrangement. Examples
are fortnightly rather than weekly pay or work according to certain types of rosters. Suggesting that
individual flexibility arrangements are an appropriate vehicle for this type of issue is not realistic and
is a way of limiting access to such arrangements.
24.
Achieving the legislative aim with regard to individual flexibility arrangements is important because
employees thereby have the opportunity to realise individual aspirations in a way which satisfies the
better off overall test and does not undercut legitimate collective employment standards.
Furthermore, these arrangements support an employer's measures to accommodate a diverse
workforce and encourage additional participation by women and continued participation by older
employees whose legitimate requirements vary considerably.
25.
There should be unequivocal capacity for individual flexibility about the list of matters contained in
Schedule 2.2 – Model Flexibility Term and the modern awards. To this could be added items which
make sense to the parties at an enterprise. It should not be open to unions to press for the limitation
of flexibilities which Parliament has intended that individual employees should have.
26.
The current requirement that either party be able to withdraw from an individual flexibility
arrangement on 28 days' notice needs reconsideration. If, for example, BHP Billiton at one of its
sites has designed certain workplace arrangements around requests made by individuals, it should
not be open to those employees unilaterally to terminate flexibility arrangements specifically
accommodated by those arrangements. At least where withdrawal would impact unreasonably upon
operational considerations, the capacity for unilateral termination should be removed or made
subject to consent or a reasonable dispute settlement process managed by Fair Work Australia.
Another relevant consideration would be the expiry of the enterprise agreement by reference to
which the individual flexibility arrangement operates.
Greenfields agreements
27.
BHP Billiton is a major investor in large resources industry construction projects in Australia as
shown in Attachment B. It is imperative that BHP Billiton, and others in similar positions, be able to
make investment decisions with reasonable certainty about initial employment terms and free of
unreasonable industrial pressure.
28.
The solution for this is to make provision for timely recourse to Fair Work Australia to seek a
greenfields arrangement by limited arbitration, with strict time limits, if conscientious employer efforts
to achieve a greenfields agreement are unsuccessful. An employer proposal which Fair Work
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
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Australia considers ought reasonably to have been accepted would be endorsed and made
operative either in the form presented by the employer or with such amendments as Fair Work
Australia considers appropriate. This will enable critical investment decisions to be made with
appropriate certainty while at the same time ensuring fair protection for the initial workforce who will
later be able to bargain with the employer for themselves. It will remove the capacity for unions to
hold a project to ransom by pursuing inappropriate or exorbitant claims.
29.
This problem is being confronted by BHP Billiton in several of its resources industry construction
projects.
30.
BHP Billiton is a co-venturer with Esso Australia in a long standing oil and gas production venture in
Bass Strait. The Kipper-Tuna and Turrum projects are current major expansion projects in this joint
venture. The operator faced the difficulty that the projects require the building and then deployment
of expensive and special purpose vessels and facilities, sourced outside Australia, which then had
inflexible sailing schedules to Australia, easily discernable to Australian construction unions. The
deployment of many other vessels and operations turned on this. The Australian construction unions
took advantage of this situation to hold out for unreasonable demands for wages and the
employment of favoured individuals, banking on the operator ultimately having no practical
alternative but to submit. This is a wholly unbalanced situation which is causing huge cost blowouts
and great damage to industry around Australia.
31.
There is a BHP Billiton Metallurgical Coal Project Development Group, known as the Project Hub,
based in Brisbane which oversees major construction projects for BHP Billiton Metallurgical Coal in
Australia. Set out below are some instances where a greenfields arrangement was to be utilised by
a contractor on major project, but the contractor encountered unreasonable difficulties and delay:
(a)
In October 2011 a principal construction contractor for BHP Billiton introduced its Bowen
Basin Project Hours of Work Policy consistently with an agreement which it had earlier
reached with relevant unions allowing for employer discretion in the establishment of work
rosters. The Policy introduced an hours of work framework which was opposed by the
unions. An impasse resulted. Union acceptance of greenfields agreements in connection
with the Caval Ridge project was held up to put pressure on the contractor to revise the
Policy.
(b)
The contractor selected as the mechanical and electrical contractor on the Broadmeadow
Sustaining Operations (BSO) Project in Queensland was, at the time of the award of the
contract, also negotiating with the CFMEU (Construction & General Division) for a state-wide
commercial construction agreement. That agreement was not greenfields in nature and had
no relationship with the BSO Project. When the contractor approached conventional
construction unions (CFMEU, AMWU and CEPU) for a greenfields agreement covering the
BSO Project, the unions advised that they would not agree. This state of affairs continued
until the impasse over the commercial construction agreement was resolved. In other
words, BHP Billiton's project was held up while an extraneous dispute in the commercial
construction industry was resolved.
(c)
It is a legislative requirement that the union or unions with whom a greenfields agreement is
made must have the capacity under relevant eligibility for membership rules to cover a
majority of the intended workforce. While this is ordinarily a legitimate consideration, it can
lead to impasses beyond the control of the employer. It can place an unnecessary burden
on an employer required to understand the intricacies of union eligibility rules. Two recent
examples of this concerned a marine contractor for the Hay Point Expansion 3 project and a
civil contractor on the BSO Project, each of which sought greenfields agreements for their
scopes of work. A strategy to engage with four traditional construction unions (AMWU,
AWU, CEPU and CFMEU) is presently not attainable in Queensland because the AWU
refuses to participate in negotiations which involve the CFMEU. As a result, these
contractors were required to determine which unions to engage while still meeting the
legislative requirements that the unions have capacity to cover a majority of the employees.
Such capacity can be dependent, amongst other things, on the size and power of machinery
and other tricky issues which arise in union eligibility rules. Such considerations could have
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
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been overcome by an agreement jointly with unions including both the AWU and the
CFMEU. This inter-union quarrel undermined the utility of a greenfields agreement in each
particular case.
32.
It is unacceptable that major projects can be held up and used as bargaining chips in extraneous
union controversies or so as to extract exorbitant wages and conditions well over industry standards.
33.
The solution proposed by BHP Billiton in paragraph 28 will remove the capacity for unions to hold a
project to ransom and still meet the legislative intention in a reasonable and effective manner.
Individual statutory agreements for high income employees
34.
BHP Billiton strives to achieve direct employee engagement through open, honest and timely
employee communications and by encouraging employee involvement and personal development.
These objectives are founded in BHP Billiton’s values as set out in paragraph 7 above. BHP Billiton
provides its employees with competitive remuneration, attractive conditions of employment and
win/win outcomes by aligning their rewards, wherever possible, with the key drivers of operational
success. It seeks industrial instruments which help achieve, and do not undermine, these
objectives.
35.
The means of achieving the statutory object in paragraphs 3(a) and (b) of the Fair Work Act, when
considering high income employees in the resources industry, should include a facility for a statutory
individual employment agreement. The proscription in paragraph 3(c) is too sweeping. The
assumption that statutory individual employment agreements of any kind can never be part of a fair
workplace relations system is unfounded.
36.
All employees have individual employment agreements (that is, contracts) which govern their
employment. The majority of these provide for benefits above the level of any applicable statutory
instrument or operate in the absence of any instrument. There is no unfairness or other problem in
this. The real issue is whether the base entitlements of employees are sufficiently protected. This is
well managed under the Fair Work Act through modern awards and the National Employment
Standards.
37.
BHP Billiton's experience with AWAs in the resources and energy industry is that employees were
quick to choose them in circumstances where a collective option was also available. Indeed, some
employees in businesses where AWAs were available have so far elected to remain governed by
their expired AWAs rather than to come under an available collective instrument. BHP Billiton's
experience is that these employees have a particular interest in remaining under an agreement
which is personal to them and reflects their direct relationship with the Company. It is unacceptable
paternalism, and inaccurate, to say to these experienced and high earning employees that the type
of instrument under which they have elected to remain "can never be part of a fair workplace
relations system".
38.
BHP Billiton employs approximately 12,000 people in metalliferous mining operations in Western
Australia, South Australia and Queensland under instruments which in the main part are individual
arrangements including Australian workplace agreements. These have:
39.
(a)
facilitated flexible and productive work practices accommodating the needs of rapidly
changing workplaces; and
(b)
produced very attractive salaries and working conditions for employees.
In no case have these instruments been used to undercut terms of employment which would be
applicable under collective awards or agreements. The reverse is the case. The individual
agreements have been used as a vehicle for delivering generous rewards, far in excess of applicable
award provisions, to employees working flexibly in a way which is aligned with the key drivers of
operational success in the businesses in which they work.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
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40.
Such arrangements have been in place for well over a decade. Employees have readily embraced
this form of industrial instrument as being suitable for their personal needs in the context of the high
earnings available to them in the resources and energy industry.
41.
The Government has recognised the appropriateness of separate arrangements for high income
earning employees. The Fair Work Act specifically provides a mechanism for employees earning
above the high income threshold to be given an annual guarantee of earnings removing coverage by
a modern award. While this concept for separate treatment is welcome, the annual guarantee of
earnings has not proven attractive to employees. Further, it does not offer an employer any
protection against later protected industrial action by such employees in pursuit of an enterprise
agreement. For these reasons, another form of industrial instrument is required.
42.
Since the resources industry is experiencing significant growth and is subject to particular skills
shortages, the level of remuneration for the majority of its employees is well above the current high
income threshold. This industry has a particular need and its employees have a distinctive
bargaining advantage which is not the case amongst lower paid employees.
43.
It would serve the broader legislative purpose and not disadvantage employees if Parliament were to
introduce a form of individual statutory agreement limited to employees above the high income
threshold. This could either be available generally or limited to the resources and energy industry.
Such an agreement should be subjected to a better off overall test, which could be made applicable
over the life of the instrument, not just at the outset. The better off overall test could also require
measurement against an otherwise applicable enterprise agreement.
44.
Such an agreement should be able to be offered to candidates for employment with the employment
conditional upon its acceptance. The agreement should permit a period of operation of up to five
years. After its expiry date, an agreement could be terminated by either party upon application to
Fair Work Australia. There should be no access to protected industrial action during the life of a
statutory individual agreement. An employee would have full rights to be represented by a union
when bargaining for an individual statutory agreement.
Bargaining representatives
45.
Under the Fair Work Act, a union has a status in bargaining simply because it has a member. The
member may not even be financial. The member may not wish the union to be involved on his or her
behalf but baulk at being identified as a person opting out from the union's representation, or (more
likely the case) not think to do so. The employee may be a member because it suited him or her in a
previous job to join the union, or because services offered by the union other than bargaining
representation were of interest. The member may be a member of more than one union.
46.
The automatic or default status for a union under the Fair Work Act thwarts achievement of a sound
balance in the bargaining equation. It brings in unions or a particular union where, left to
themselves, employees would not manage their affairs that way. Such status is not necessary for
the effective operation of the bargaining regime under the Fair Work Act. Rather, it is a feature
designed to provide institutional assistance to unions irrespective of employee views.
47.
A union official who must be accommodated in enterprise bargaining as a result of mere default
status may only be representing a trivial number in a workforce of more than 1,000. He or she is
likely to play a far more dominating role than is warranted by the numbers and bring a union agenda
to the negotiations which is different from that of the employees. Such an official will have
experience and the confidence to outweigh others who have self-nominated or are represented by
workplace colleagues. This will stifle and distort effective employee bargaining.
48.
Representation decisions in enterprise bargaining should be active. In a number of its metalliferous
mining endeavours, BHP Billiton's employees have demonstrated a consistent preference not to take
up the opportunity for union membership and representation in their work. It has always been
available to them, with stiff accompanying statutory protections. Relevant unions have consistently
and loudly sought the attention of employees and advocated being asked to play a representative
role. As the opportunity arises for collective bargaining under the Fair Work Act, these employees
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will be able to engage or not engage a relevant union to assist them. It is unfair to these employees
to impose a default representation decision on them.
49.
The default arrangement does damage to the system because:
(a)
it discourages active engagement by employees in the process;
(b)
it encourages union complacency in its relations with members;
(c)
it gives a union with only trivial membership in an enterprise the disproportionate capacity to
become covered by an enterprise agreement with all the institutional rights and benefits
which that brings under the Act – see, for example, section 225(c); and
(d)
in combination with good faith bargaining requirements which arguably require in the
ordinary case that an employer negotiate only through bargaining representatives, it
discourages direct engagement with employees. Such an effect is contrary to a reasonable
principle which guides BHP Billiton – see paragraph 4 above – and the recent reported
comments of the Minister for Employment and Workplace Relations. 1
50.
An additional and equally important point is that a union bargaining representative should only have
the capacity to act as a bargaining representative when acting within its eligibility for membership
rule. Such a restriction has stood the test of time in Australia. Both the Fair Work Act and the Fair
Work (Registered Organisations) Act rely upon it both as a critical buffer against demarcation
disputes between unions and for the effective operation of the union governance regime.
51.
The decision in Technip Oceania Pty Ltd v W. Tracey2 dealt with a situation where an MUA Assistant
Branch Secretary was purporting to act in a personal capacity as the bargaining representative for
operators of remotely operated sub-sea vehicles beyond the eligibility for membership rule of the
MUA. Although an appeal was upheld and the attempt to be the bargaining representative of
employees failed, the controversy in this case points to the need for unequivocal legislative
disqualification of union officials acting as bargaining representatives beyond the eligibility for
membership rule of their union, whether they purport to do so personally or in an official capacity.
Otherwise, the broader legislative intention connected with union representation and avoiding
demarcation matters will be undermined.
52.
It is unsatisfactory that an employer should be subjected to industrial campaigning by a union such
as the MUA beyond its legitimate sphere and in the coverage area of a competing union by using
this sort of contrived device. The Australian industrial relations experience is one which includes
many instances of damaging demarcation disputes between unions – for example, in the civil
construction industry between the FIA and the BLF, and in the stevedoring industry between the then
WWF (now the MUA) and unions such as the FCU and the FSPU (now the ASU and the NUW,
respectively). Such disputes have subsided in recent years. It would be a most unfortunate mistake
if in an industry such as energy and resources the legislation were to encourage a reigniting of
tactics designed to pursue these unproductive and very damaging disputes.
53.
It is suggested by a Full Bench of Fair Work Australia in Shop, Distributive and Allied Employees
Association v National Union of Workers3 that competitive unionism may now be regarded as an
approach consistent with the Act. The Full Bench said:
In our view the terms of the FW Act alter the traditional approach to matters of this nature which has involved the
assumption that competition between unions for membership at the workplace level is undesirable and should be
discouraged. The freedom of employees to choose their bargaining representatives and provisions of the FW Act
that support the right to freedom of association significantly reduce the significance of the historical assumptions
1
"Shorten puts blame on managers", Australian Financial Review, 13 February 2012, pages 1 and 8.
2
[2011] FWAFB 6551.
3
[2012] FWAFB 461.
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that have applied in matters of this type. In our view a strong case needs to be presented for an order to be made
which would have an effect to modify current statutory rights.4
54.
These observations by Fair Work Australia point to the need for a legislative adjustment. Unleashing
unions to pursue contests on the ground for members undermines achievement of co-operative and
productive workplace relations. Such contests serve the interests of neither employees nor
employers in an industry. It is critical that the legislation have effective, not merely superficial,
mechanisms to avoid the use of bargaining representative appointments and protected industrial
action to further self-interested union demarcation or membership battles.
Majority support determinations
55.
The purpose of a majority support determination is to require an unwilling employer to accept
bargaining where a majority of its employees wish that course. BHP Billiton suggests that there
should be greater rigour in determining the supposed views of a majority of employees and some
time limit set, just as is the case with other steps endorsed by employees – for example, a ballot
justifying protected industrial action.
56.
The experience of Illawarra Coal is that Fair Work Australia is prepared to make a majority support
determination with no capacity by the employer to verify the information presented about the views of
employees or for the employer to correct misinformation provided to them by a union prior to a
petition being gathered.5 The present guidance in section 237(3) of the Fair Work Act enabling Fair
Work Australia to use any method it considers appropriate to determine the majority view is
unsatisfactory. This matter should be resolved by a secret ballot conducted by an appropriate
agency, such as the Australian Electoral Commission, as is the case with protected action ballot
orders. There should also be a facility for a "no case" to be put forward by an employer if it wishes.
57.
Additionally, Illawarra Coal has experience of a majority support determination being obtained by
APESMA and APESMA then pursuing bargaining over a period of years. When a lengthy period
goes by, there will inevitably be changes in circumstances and the make-up of the employee group.
This puts in doubt the ongoing validity of the original majority support determination as an expression
of the view of the employee group. BHP Billiton contends that a majority support determination
should expire after, say, six months unless extended by agreement. Otherwise, Fair Work Australia
should require a further secret ballot before renewing the majority support determination.
Protected industrial action
Access to protected industrial action
58.
The legislation provides that protected industrial action should only be available where a party has
been, and is, genuinely trying to reach an agreement – see section 443. This is a very low threshold
having regard to the way it has been interpreted by Fair Work Australia. It does not require that a
union be meeting the good faith bargaining requirements.6 Additionally, Fair Work Australia has
given no emphasis to the words "to reach an agreement".
59.
BHP Billiton contends that protected industrial action and statutory immunity from legal redress
should be available to a party only where significant efforts have been made to negotiate, Fair Work
Australia is positively satisfied that the party seeking it is meeting the good faith bargaining
requirements, and a genuine impasse has arisen which is preventing the agreement from being
reached. In particular, it should not be available as an early softening up process to condition the
later negotiations.
4
See paragraph [57].
5
Determinations of Vice President Lawler in transcript, B2010/3117 Association of Professional Engineers, Scientists and Managers,
Australia, The Collieries' Staff Division and Endeavour Coal Pty Ltd on 1 July 2010.
6
Transport Workers' Union of Australia v CRT Group Pty Ltd [2009] FWA 425.
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60.
A union should not be able prematurely to obtain a protected action ballot order. It is the routine
experience of employers, however, that protected action ballot orders are sought and obtained as a
preliminary step in enterprise bargaining whether or not there is any immediate intention to take
protected action and whether or not an impasse has genuinely arisen.
61.
In Total Marine Services Pty Ltd v Maritime Union of Australia 7 a Full Bench (Watson VP,
Hamberger SDP and Roberts C) upheld an appeal from a decision granting a protected ballot order
on the basis that the application was premature and insufficient steps had been taken to satisfy the
test that the applicant had genuinely tried to reach an agreement. Regrettably, later the same month
another Full Bench (Lawler VP, Ives DP and Spencer C) declined to follow this decision, rejecting
the idea that because the application was at a premature stage of the negotiations, a protected
action ballot order should not be granted: see Farstad Shipping (Indian Pacific) Pty Ltd v Maritime
Union of Australia.8 The Full Bench approach evident in the Farstad Shipping case appears to have
prevailed.9 The legislative purpose would be far better served, however, if the approach of the Full
Bench in the Total Marine Services case were to apply and be bolstered.
62.
BHP Billiton has its own direct experience of this problem in the current BMA coal mining enterprise
agreement negotiations in the Bowen Basin. The CFMEU, AMWU and CEPU each obtained
protected action ballot orders and commenced taking protected industrial action as soon as the
nominal expiry dates of current agreements were reached. This occurred despite the parties being
engaged in apparently useful negotiations with further negotiations programmed. It occurred without
the unions needing even to articulate the particular claims in support of which the action was taken.
63.
Another example of inappropriate premature access to industrial action is illustrated by the decision
of the Full Bench in J.J. Richards & Sons Pty Ltd v Transport Workers' Union of Australia.10 The
TWU was permitted access to protected industrial action in order to force an employer to the
bargaining table. The very clear legislative intention was that the problem faced by the union in this
case – an unwillingness of an employer to bargain – was to be resolved one way or the other by
access to a majority support determination. In this regard, see in particular paragraphs 651 and 948
of the Explanatory Memorandum to the Fair Work Bill. The Government policy as expressed in
those paragraphs is being frustrated.
64.
The solution to these problems is to amend sections 413 and 443 (and any associated provisions) so
as to make clear that protected industrial action and protected action ballot orders are only available
where:
(a)
an employer has agreed to bargain or, if not, a majority support determination has been
made; and
(b)
Fair Work Australia is satisfied that the applicant is bargaining in good faith and that an
impasse in negotiations has been reached.
Unilateral withdrawal by unions of notice of industrial action
65.
The Fair Work Act requires that a union give three clear working days' notice of protected action.
The purpose of this is explained in Davids Distribution Pty Ltd v National Union of Workers by
Justices Wilcox and Cooper as follows:
We think [the predecessor section] was designed to ensure that industrial disputants who are to become affected by
protected action, in relation to which their usual legal rights are significantly diminished, are at least able to take
appropriate defensive action. For example, an employer may operate a sophisticated item of equipment that will be
7
[2009] FWAFB 368.
8
[2011] FWAFB 1686 at [7]-[8]. These reasons for decision were issued on 17 March 2011, the outcome having been announced in
transcript on 23 October 2009.
9
See J.J. Richards & Sons Pty Ltd v Transport Workers' Union [2010] FWAFB 9963 at [84]-[91].
10
[2010] FWAFB 9963.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 12
damaged if precipitately shut down. If warned in advance of a ban that might affect the continued operation of that
plant, the employer might choose a controlled shut down during the period of the notice. More commonly, perhaps,
an employer might use the notice time to communicate with suppliers and customers, and thereby reduce the
consequences for them of the notified industrial action. … Similarly, an employer might respond to an employees'
notice of bans by giving notice of a lockout of some or all employees.11
66.
The three days' notice of industrial action provision is being misused. The tactic of giving notice, and
then unilaterally withdrawing it at the eleventh hour, has become a weapon in enterprise bargaining.
BHP Billiton has experienced this in its current BMA coal mining negotiations in the Bowen Basin. It
is notorious that Qantas faced the same tactic in enterprise bargaining in late 2011. The tactic is
illegitimate and widespread. It comes at no cost to unions and employees but causes considerable
inconvenience and damage to employers and people who rely on them. By reference to the
examples given by Justices Wilcox and Cooper:
(a)
an employer may have gone into a controlled shut down of sophisticated equipment or plant;
or
(b)
an employer may have notified customers who may have made alternative commercial
arrangements.
In both cases, it would be a fraud on the system for a union to have given the notice disingenuously
with no intention of pursuing the industrial action. But that is what is happening.
67.
The solution for this problem is to disqualify a union which engages in the tactic from giving further
protected action notices for, say, 60 or 90 days. This disqualification should apply unless:
(a)
the withdrawal is by written agreement with the employer; or
(b)
Fair Work Australia has certified that the withdrawal was reasonable based on appropriate
tests.
No change to notification of employer responsive lockout
68.
The Fair Work Act permits an employer to take lockout action in response to protected action the
employer is experiencing. There is no requirement for a period of 72 hours to elapse after the
lockout notice has been given as would be the case with non-responsive employee industrial action.
There are suggestions being aired publicly that 72 hours' notice of a responsive employer lockout
should be required. No such amendment should be made.
69.
BHP Billiton has not used the lockout provisions of the Act. Nevertheless, it is important for the
scheme of the legislation that the facility for a responsive lockout remain and not be made
unworkable by interposing a requirement for 72 hours' notice: see, again, the comments of Justices
Wilcox and Cooper above. The reasons for this are:
(a)
quick resort to a lockout is an essential potential response to selective work bans which
might be imposed upon an employer through protected action;
(b)
in a highly charged and emotional environment in which employees are themselves taking
industrial action, there is a risk of industrial sabotage; and
(c)
an employer may face the threat of unlawful picket or sit-in tactics (for example in an
underground mine or on a vessel) requiring an immediate or pre-emptive response by way
of lockout to avert serious consequences.
Strike pay
70.
11
The Fair Work Act provides that an employer must not make a payment to an employee in relation to
periods of protected industrial action. This is consistent with longstanding legislative policy.
Moreover, it sits well with the balance intended to be provided in an enterprise bargaining context.
(1999) 91 IR 198 at 228.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 13
The imposition of protected action, which will inflict significant damage on an employer, should come
at a price for the employees imposing the damage. They should lose pay for the period of the
industrial action.
71.
Maintaining this balance is a critical matter in the justification for the legal immunity granted by
section 415. It is undermined if a union sponsoring protected action itself pays the employees on
strike.
72.
BHP Billiton has experienced this approach by coal mining unions. Additionally, there is experience
of the coal mining unions requiring attendance on union-sponsored picket lines in order to qualify for
strike pay. Depending on the nature of the picket activity, this conduct may be tortious.
73.
Unions are now large and diverse corporations with considerable assets. Strike pay can be funded
by them through membership dues or many other assets to which they have access. The balance
referred to in the preceding paragraphs is disturbed by such payments. The justification for the legal
immunity is compromised.
74.
BHP Billiton contends that the legislation should be clarified so that unions may not:
(a)
bring claims for strike pay (the status quo);
(b)
pursue retrospective application of wage increases in enterprise agreements in respect of
periods where industrial action was being taken;
(c)
themselves fund strike pay; or
(d)
induce employees to participate in pickets or other such union activity by making strike pay
conditional on that conduct.
Pattern bargaining
75.
BHP Billiton contends that the legislation should be clarified so that the apparent prohibition on
protected industrial action in support of pattern bargaining (sections 409(4) and 412) is able to
operate effectively. At the moment, the legislative intention is not being achieved.
76.
Fair Work Australia should be empowered to examine the substance of the situation to see whether
an employer is facing genuine enterprise claims or something else. It should be able to look beyond
paper claims, take into account historical bargaining approaches and other such indicators which it
considers appropriate in a particular case. It should have a clear power to put a brake on the use of
protected industrial action where the true position is that industry or pattern bargaining is being
pursued. Sections 412 (pattern bargaining definition) and 443 (ballot orders) need amendment to
give Fair Work Australia robust capacity to deal with this.
77.
Sections 409(4) and 412 are intended to prevent use of protected industrial action in support of
common claims across an industry. However, decisions concerning this section and its predecessor
(which was not materially different) have rendered the section nugatory. 12 Common claims are
treated as limited to claims which are identical in every way. As a result, it is a simple matter for
unions advancing industry-wide claims to camouflage the industry (or pattern bargaining) nature of
those claims through cosmetic and disingenuous modification to make them appear enterprise
specific. Unions can then impose pressure through use of protected industrial action enabling the
achievement of, in substance, an industry-wide outcome in enterprise agreements drawn in common
form.
78.
A recent and clear cut example of this which affects BHP Billiton's interests in the oil and gas
industry concerned the offshore vessel operator section of the maritime industry. Protected action
was able to be used by the MUA against the various vessel operators during 2009 and into 2010.
The history of the sector is that its employers bargain with the maritime unions on a collective or
12
Trinity Garden Aged Care and Another (Full Bench of the AIRC) 21 August 2006, PR973718 upholding a first instance decision of VP
Lawler. See also National Tertiary Education Industry Union v University of Queensland [2009] FWA 90, Richards SDP.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 14
industry basis. The recent bargaining round commenced in this way with employers represented
collectively through AMMA. At a time which suited the MUA, it purported to break away from the
industry bargaining and pursue individual enterprise bargaining with marginally different paper claims
for the various vessel operators. It then moved to engage in strategic rounds of protected industrial
action against individual employers. The employers were all contractors with heavy capital
commitments and obligations to pay other categories of seagoing labour not on strike. Each
employer was vulnerable to damaging losses while its competitors worked on servicing the principals
usually serviced by the affected employer. The result was that these employers had to concede the
exorbitant pay rises in truth demanded of all of them – including salary increases of 30% plus
substantial construction industry allowances of over $200 per day. Analysis of the resulting
enterprise bargains demonstrates that an industry campaign involving pattern bargaining had been
waged. The various enterprise bargains are identical on all matters of substance. 13
79.
BHP Billiton is experiencing the same issue at the hands of the maritime unions in dredging
operations in North-West Australian ports. Dredging is critical work in the maintenance of ports for
the export of product. Dredging employers find it very difficult not to submit to industry claims which
are otherwise forced on them by their 100 per cent unionised workforces through the illegitimate use
of protected action.
80.
To be clear, the complaint is not that particular unions or employers find it convenient to take an
industry-wide approach to bargaining in an industry. It may well make sense for them, particularly in
the case of a contracting industry. However, the Fair Work Act does not intend that parties engaging
in industry-wide negotiations should have available to them protected action with the accompanying
legal immunity when pressing their claims. This is the problem which needs to be tackled.
Right of entry
81.
The Government policy which foreshadowed the Fair Work Act suggested that there would be no
change in longstanding right of entry arrangements for union officials. 14 However, a significant
practical change resulted from the Fair Work Act in this area. The change was the removal of the
former connection between a union's rights of entry and its status as a union covered by an award or
agreement applicable to the workplace. It is now sufficient for a union official wishing to exercise a
right of entry that employees in the workplace are eligible to be members of the particular union. It
does not matter that the union may have no relationship with the site or that there is another wellestablished union which represents the industrial interests of the employees at the site under a
current agreement.
82.
It is an unreasonable burden on an employer, or a supervisor or security guard needing to administer
the system, to be expected to understand the intricacies of union eligibility for membership rules.
These rules tend to be convoluted and confusing, and to contain arcane and archaic language. By
contrast, an employer, supervisor or security guard will readily know if the site is covered by a
particular award or agreement, and the relationship of the union in question to that award or
agreement.
83.
The principal right to be provided here is that of the employees, if they wish, to be industrially
represented and assisted by a union of their choice. Another right to be balanced is that of the
employer not to be unreasonably required to permit uninvited union officials onto its site, or to have
an outside union, acting in its own interest, come on site to disturb settled industrial representation
arrangements. Membership drives and competitive union initiatives should not be any part of the
13
See, for example, Farstad Shipping (Indian Pacific) Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas)
Enterprise Agreement 2010; Total Marine Services Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas)
Enterprise Agreement 2010; Tidewater Marine Australia Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and
Gas) Enterprise Agreement 2010; Mermaid Marine Vessel Operations Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers
(Offshore Oil and Gas) Enterprise Agreement 2010; Go Offshore Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore
Oil and Gas) Enterprise Agreement 2010; Svitzer Australia Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and
Gas) Enterprise Agreement 2010; Offshore Marine Services Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil
and Gas) Enterprise Agreement 2010; and Bhagwan Marine Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil
and Gas) Enterprise Agreement 2010.
14
ALP Forward with Fairness, Policy Implementation Plan, 28 August 2007.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 15
equation. If a union wishes to market its industrial representation capacity to potential members, it is
free to do so but this should not bring with it statutory rights of entry to an employer's workplace.
84.
BHP Billiton has experienced extraordinary numbers of rights of entry visits in some of its workplaces
since the introduction of the new regime under the Fair Work Act. By way of illustration, the following
shows the numbers of statutory rights of entry undertaken by union officials in the last five years at
BHP Billiton's Worsley Alumina plant in Western Australia in both operations and construction
arenas:
Worsley Alumina
Operations
Worsley Alumina Construction
AWU
AMWU
AWU
AMWU
CFMEU
CEPU
2007
0
0
0
0
0
0
2008
0
0
19
1
54
8
2009
12
11
28
67
233
27
2010
68
48
43
103
427
103
2011
162
13
4
130
234
183
85.
There is no justification for imposing upon an employer or its employees a requirement to submit to
this level of intervention within a private workplace. No statutory object requires this.
86.
The solution is to reinstate the link with coverage under a relevant industrial instrument. BHP Billiton
acknowledges that this is more complicated than previously was the case because, under the Fair
Work Act, unions are not party to modern awards and are merely persons covered by, rather than
party to, enterprise agreements. It suggests as follows:
87.
(a)
Where employees are for the time being covered by an enterprise agreement or enterprise
award which also covers particular unions, any union not so covered should not have a
statutory right of entry to the workplace in respect of those employees;
(b)
Where employees are covered by a modern award only, a relevant union's right of entry
should be limited to a right to talk to current members or to investigate suspected breaches
affecting members. Such rights should not extend to persons who are merely eligible for
membership.
In BHP Billiton's view, there is no warrant for a statutory right of entry for uninvited union officials
without members or a current representative role at a workplace. If such a right is to persist, it
should be limited to, say, three such visits per year.
Adverse action
88.
It is uncontroversial that a fair system of industrial relations will provide employees with the freedom
to join a union or not join a union, freedom to undertake legitimate union activities, etc. It is
uncontroversial that employers and persons bound by industrial instruments should have an
enforceable statutory obligation to comply with their terms. It is also uncontroversial that employers
and employees should not engage in unlawful discrimination in connection with employment. In
different ways, legislative protections about these matters have long existed and companies such as
BHP Billiton are supportive of them.
89.
However, problems have emerged during the operation of the Fair Work Act in this area because of
features of the adverse action provisions. The problems are discussed below.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
(a)
Page 16
Interference with management decision making
Adverse action claims are being used to interfere unreasonably with ordinary management decision
making and performance management processes. Dispute settlement procedures have been
developed over the years in a way which manages these matters satisfactorily so that concerns
about non-observance of relevant provisions are raised after the event rather than in a way which
thwarts or disrupts ordinary decisions and processes. Additionally, for the first time, the Fair Work
Act has made available injunctive relief for a union or employee claiming that an industrial instrument
is not being observed. This is an unsatisfactory and unnecessary development.
(b)
Breadth of "workplace right"
Workplace right is too broadly defined. For example, merely being able to make a complaint or
inquiry in relation to an employee's employment is enough under Part 3-1 to warrant judicial
intervention by way of injunction or imposition of penalty. This goes much further than is necessary
to outlaw victimisation. It could not have been the intention of Parliament to allow, for example, an
executive who has made a complaint (it could be to anyone) about his or her incentive
arrangements, and perceives some direct or indirect detriment in employment as a result, to have a
legal remedy under the Fair Work Act by way of injunction in the Federal Court of Australia.
Illustration: In BMA Coal, an employee claimed unlawful adverse action because an HR officer was
present during an interview with the employee in the course of a safety investigation. The enterprise
agreement did not expressly provide for an HR officer to be in attendance. The supposed workplace
right was a right for the employee to be the subject of the disciplinary interview without an HR officer
present. While the Federal Court dismissed the application, 15 it is unsatisfactory that the legislation
should appear to leave open judicial intervention in matters such as this, particularly in a no costs
jurisdiction.
(c)
Undermining unfair dismissal regime
The Act establishes an elaborate regime in connection with unfair dismissal claims. An unfair
dismissal remedy is available to an employee subject to satisfying a qualifying period, being below a
statutory high income threshold (if not covered by an instrument), and complying with appropriate
time constraints for the bringing of a claim. There is also a limit upon the compensation able to be
awarded. These carefully drawn limitations are being undermined every day by resort to adverse
action claims where the same limitations do not apply. As a result, the legislative purposes in
connection with the unfair dismissal regime are being defeated.
(d)
Extension of delegate immunity
The recent majority decision of the Full Court of the Federal Court of Australia in Barclay v The
Board of Bendigo Regional Institute of Technical and Further Education16 suggests that any form of
discipline in response to conduct of a union delegate is unlawful adverse action regardless of the
nature of the conduct. So long as the conduct can be objectively linked to a union capacity, it is not
open – on the approach of the majority – for that conduct to be the subject of any reprimand,
regardless of whether the conduct is inappropriate or otherwise in breach of employment obligations
or disciplinary standards. The reprimand would be actionable even though it was not, in fact,
motivated at all by any "industrial activity", etc, consideration. It is to be assumed for present
purposes that the majority has correctly interpreted the legislation even though it appears to have
departed from longstanding authority.17
So, for example, an employee union delegate abusing a supervisor would be untouchable in his or
her employment if the delegate were engaging in the behaviour in the capacity of delegate. If a
union delegate is absent from work without prior notice or approval in order to attend some union
15
CFMEU v BHP Coal Pty Ltd [2010] FCA 590.
16
[2011] FCAFC 14.
17
General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 17
meeting, the employer would engage in unlawful adverse action by holding the delegate to account
in the same way it would any other employee who, without notifying the employer, is absent from
duty. In both examples, it would be no defence for the employer to satisfy the reverse onus of proof
by showing that it was not in any degree motivated by considerations around the employee's status
as delegate. It would be no defence for the employer to show that whatever disciplinary measure it
implemented was warranted on the merits. This is a matter which should be corrected by legislative
amendment.
There is considerable wisdom in the approach formerly taken by the courts in this area as
exemplified by the decision of Justice Morling of the Federal Court in Lewis v Qantas Airways Ltd.18
The Court was dealing with employment misconduct (a clock card offence) by an employee who
happened to be a union delegate and had a troublesome history with the employer in that role.
Justice Morling said:
The timekeeping offence for which the prosecutor was dismissed had no relation to his position as a union delegate
or to the part which he had played in the industrial disputation with the company. His position as delegate gave him
no immunity from dismissal for the offence. A passage in the judgment of the Court Session of the Industrial
Commission of New South Wales sitting in Court Session in Re Dispute at Broken Hill Pty. Co. Ltd. Steel Works,
Newcastle (No.2) makes the same point as that made by Northrop J. to which I have referred above. Speaking of
s. 95 of the Industrial Arbitration Act, 1940 (N.S.W.), which has much in common with s. 5 of the Conciliation and
Arbitration Act, Richards, Beattie and Kelleher JJ said: "Any case that comes before an industrial tribunal involving
the dismissal of a union delegate requires anxious consideration by the tribunal with a view to ensuring that no man
be unjustly penalised for his participation in legitimate activity as a representative of his union. It is basic to our
system that employees should be organized in industrial unions and it is through such unions that approach must
be made to the tribunals set up. Men who are willing to play a part in the affairs of an industrial union are entitled
to expect that they will not be prejudiced in their employment because of any legitimate actions they take in any
union office they assume. Indeed, it is an offence under s. 95 of the Industrial Arbitration Act for an employer to
dismiss an employee or injure him in his employment or alter his position to his prejudice by reason of the fact that
the employee is an officer, delegate or member of a trade or industrial union. But, while this Commission will be
vigilant to protect the position of any delegate unjustly dealt with by an employer for legitimate activity on behalf of
his union, it certainly will not regard delegateship as a magic cloak conferring on the wearer immunity from liability
from wrongful actions."19
It is important that the legislation retain provisions which allow the courts administering the adverse
action regime to draw these distinctions when handling situations involving claimed adverse action
concerning industrial activities or workplace rights.
(e)
Adverse action and entitlement to benefit of an industrial instrument
It is the responsibility of an employer to make decisions about how and where to invest its capital
and resources. It is consistent with the objects of the Act that the employer be guided by productivity
and efficiency considerations. Such considerations will entail, directly or indirectly, labour costs
which are themselves affected by industrial instruments. From time to time, therefore, investment or
operational decisions will be made which have the consequence that employees will not have
access to industrial instruments.
The Fair Work Act makes it unlawful to take adverse action because a person is entitled to the
benefit of an industrial instrument, or for reasons which include that matter. So, too, did the
predecessor legislation. However, the Fair Work Act has removed a relevant qualification. Under
the predecessor legislation, such conduct was only unlawful if the sole or dominant purpose was to
avoid the instrument.
This was a very important qualification because it overcame an unmanageable and unintended
situation grappled with by the Full Court of the Federal Court in Greater Dandenong City Council v
Australian Municipal, Clerical and Services Union 20 and further discussed by Justice Branson in
Maritime Union of Australia v CSL Australia Pty Ltd.21 The legislation discussed in these cases
18
(1981) 54 FLR 101.
19
See pages 113-114.
20
(2001) 184 ALR 641.
21
(2002) 113 IR 326.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 18
required, in order to avoid absurd outcomes, an impractical distinction to be drawn between the
"cause (or proximate reason)" for an employer's conduct and the "operative (or immediate) reason"
for that conduct. The problem was solved legislatively by introducing the sole or dominant purpose
test. It is unfair to an employer that the need to try to draw such distinctions when going about its
operational decision making has been reimposed by the Fair Work Act.
The solution is again to insert the sole or dominant purpose test in connection with this aspect of the
adverse action regime, namely where the adverse action concerns an entitlement to the benefit of an
industrial instrument.
(f)
Forum shopping in unlawful discrimination
There is well-established state and federal legislation, plus investigative bodies and tribunals,
appropriately dealing with unlawful discrimination in connection with employment, contractor
arrangements and provision of services. It is an unreasonable burden on employers and confusing
for employees for another entire regime to be superimposed dealing specifically with these matters.
It allows inappropriately for forum shopping.
Illustration: At Nickel West, an employee recently filed both an adverse action claim under the Fair
Work Act and an anti-discrimination claim under the Western Australian laws about the same subject
matter. While this matter was soluble under the principles adopted in the various tribunals, Nickel
West still had to deal with the claim in both forums. It would be better if the legislation discouraged
rather than unnecessarily facilitated pursuit of a matter in more than one venue.
Redundancy and redeployment
90.
Sections 385 and 389 of the Fair Work Act remove from the unfair dismissal regime cases of
genuine redundancy provided that, amongst other things, it would not have been reasonable for the
employee to have been redeployed by the employer within the enterprise of an associated entity.
91.
BHP Billiton accepts the legitimacy of some provision such as this operating as an anti-avoidance
device. However, the provision extends too far in the case of a diverse corporate group with a
variety of plants, offices or mines around the country most of which operate independently and in
separate businesses. More guidance about the purpose of the extension to an enterprise of an
associated entity should be given in section 389. The extension to associated entities should be
designed expressly to operate where an employer is claiming that there is a genuine redundancy in
spurious circumstances such as by closing a plant and immediately re-opening it with a different
employing entity.
Conclusion
92.
The matters discussed above are intended to assist the Review Panel with the experience of a major
and diverse Australian employer operating under the Fair Work Act. The problems identified are
genuine ones. Introducing the solutions proposed will assist industrial parties in Australian
workplaces to give effect to the objects of the legislation in a reasonable and fair-minded way.
93.
BHP Billiton will be pleased to expand upon any of the matters mentioned in a way which would
assist the Review Panel either in writing or orally.
94.
The balance of this submission deals with responses to specific questions set out in Attachment B of
the Fair Work Act Review Background Paper.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 19
PART 2 – RESPONSES TO QUESTIONS
General
1. Has the Fair Work Act created a balanced framework for cooperative and productive workplace
relations that promotes national economic prosperity and social inclusion for all Australians? If so,
how? If not, why not?
See Part 1 of the BHP Billiton submission generally.
In particular, see in Part 1 of the BHP Billiton submission paragraphs 12 to 20 dealing with agreement
content, paragraphs 21 to 26 dealing with individual flexibility arrangements, paragraphs 27 to 33 dealing
with greenfields agreements, paragraphs 34 to 44 dealing with individual statutory agreements for high
income employees, paragraphs 45 to 54 dealing with bargaining representatives, paragraphs 55 to 57
dealing with majority support determinations, paragraphs 58 to 64 dealing with access to protected industrial
action, paragraphs 65 to 67 dealing with unilateral withdrawal by unions of notices of industrial action,
paragraphs 75 to 80 dealing with pattern bargaining and paragraphs 81 to 87 dealing with right of entry.
4. Has the Fair Work Act facilitated flexible working arrangements to assist employees to balance
their work and family responsibilities?
See paragraphs 21 to 26 of Part 1 of the BHP Billiton submission.
5. Has the Fair Work Act’s focus on enterprise level collective bargaining helped to achieve
improved productivity and fairness?
No.
See paragraphs 34 to 44 of Part 1 of the BHP Billiton submission.
Safety net
14. Are employees appropriately protected when making Individual Flexibility Arrangements? Is the
safety net of minimum employment conditions appropriately guaranteed and protected from being
undermined?
See paragraphs 21 to 26 of Part 1 of the BHP Billiton submission.
18. Without examining particular content in modern awards (which is a matter to be dealt with in
FWA’s review of modern awards), what has been the impact on employers, employees and regulators
of consolidating the large number of state and federal awards and transitional instruments that
applied before the Fair Work Act and replacing them with significantly fewer modern awards made on
a national basis?
This has been a useful development.
Bargaining and agreement-making
20. Does the bargaining framework promote discussion and uptake of measures to improve
workplace productivity?
No. See in Part 1 of the BHP Billiton submission paragraphs 12 to 20 dealing with agreement content and
paragraphs 34 to 44 dealing with individual statutory agreements for high income employees.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 20
21. How have employers pursued productivity improvements during bargaining for a new enterprise
agreement? Are there any obstacles to achieving productivity improvements in bargaining in the
legislation? How do these obstacles differ from the situation that existed prior to the Fair Work Act?
See the answer to questions 1 and 20 above.
23. What has been the impact of allowing a wider range of matters to be included in enterprise
agreements by removing the list of “prohibited content” provided under the Workplace Relations
Act? What has been the impact on bargaining and productivity? What has been the impact on
employees’ capacity to be represented in the workplace?
See paragraphs 12 to 20 of Part 1 of the BHP Billiton submission.
25. Are Individual Flexibility Arrangements allowed for under the flexibility terms of enterprise
agreements providing employers and employees with the flexibility to tailor working arrangements to
meet their genuine needs? If so, how? If not, why not?
No. See paragraphs 21 to 26 of Part 1 of the BHP Billiton submission.
Transfer of business
36. Do the range of matters which FWA must consider when making an order in relation to a transfer
of business strike the right balance between protecting employee and employer interests?
There is no particular objection to the list of factors. However, Fair Work Australia should be encouraged to
be more discriminating in how it assesses views of relevant stakeholders. For example, an employer's view
about whether a significant economic disadvantage will be incurred by it or the degree of business synergy
available should be given particular weight.
General protections
37. Do the general protections provisions provide adequate protection of employees’ workplace
rights, including the right to freedom of association and against workplace discrimination?
See paragraphs 88 to 89 of Part 1 of the BHP Billiton submission.
38. Do the provisions provide effective relief for persons who have been discriminated against,
victimised or otherwise adversely affected as a result of contraventions of the general protections?
See paragraphs 88 to 89 of Part 1 of the BHP Billiton submission.
39. Should dismissed employees be able to invoke the general protection provisions to challenge
their termination without any time limit on making an application? If so, why, and if not, why not?
No. The carefully drawn limitations on access to unfair dismissal remedies should not be undermined. See
paragraph 89(c) of Part 1 of the BHP Billiton submission.
40. Has the consolidation and streamlining of workplace protections into the general protections
provisions made it easier for employers and employees to understand their rights and obligations?
What impact has this had?
No. See paragraph 89 of Part 1 of the BHP Billiton submission.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 21
Unfair dismissal
50. What has been the impact of removing the genuine operational reasons defence to an unfair
dismissal claim and replacing it with the requirements for genuine redundancy?
See paragraphs 90 to 91 of Part 1 of the BHP Billiton submission.
Industrial action
54. Should applications for protected action ballots be permitted where no majority support
determination has been made by FWA, and where the employer has not agreed to engage in
collective bargaining? If so, why, and if not, why not?
No. See paragraphs 58 to 64 (particularly paragraph 63) of Part 1 of the BHP Billiton submission.
55. Are the powers and procedures possessed by FWA to suspend or to terminate protected
industrial action adequate to resolve intractable disputes? If not, why not, and if so, why?
BHP Billiton submits that the threshold as interpreted by the High Court in Coal & Allied v AIRC (2000) 203
CLR 194 should be maintained.
58. Is the taking of industrial action in support of pattern bargaining effectively prohibited by the Fair
Work Act?
No. See paragraphs 58 to 64 of Part 1 of the BHP Billiton submission.
Right of entry
62. What has been the impact of union right of entry being linked to the right of a union to represent
the industrial interests of an employee, rather than coverage by a type of instrument?
See paragraphs 81 to 87 of Part 1 of the BHP Billiton submission.
63. Do the right of entry provisions balance the right of unions to enter workplaces to meet with
employees and investigate breaches of legislation and the right of employers to go about their
business without undue inconvenience?
No. See paragraphs 81 to 87 of Part 1 of the BHP Billiton submission.
Gary Brown
Head of Group Human Resources
BHP Billiton
Ph: +61 3 9609 3769
[email protected]
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
ATTACHMENT A
Map of BHP Billiton Operations in Australia
Page 22
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 23
ATTACHMENT B
Extract from BHP Billiton's Exploration and Development Report
for the quarter ended 31 December 201122
Project and ownership
Share of
approved
capex (US$m)
Production capacity (100%)
Quarterly progress
Macedon
(Australia)
71.43%
Gas
1,050
200 million cubic feet gas per
day.
On schedule. The overall
project is 45% complete.
Bass Strait Kipper
(Australia)
32.5% - 50%
Gas/Gas Liquids
900
10,000 bpd condensate and
processing capacity of 80
million cubic feet gas per day.
On revised schedule. The
overall project is 88%
complete.
Bass Strait Turrum
(Australia)
50%
Gas/Gas Liquids
1,350
11,000 bpd condensate and
processing capacity of 200
million cubic feet gas per day.
On revised schedule. The
overall project is 72%
complete.
North West Shelf North
Rankin B Gas
Compression
(Australia)
16.67%
LNG
850
2,500 million cubic feet gas per
day.
Steady state production
remains on track for CY13.
The overall project is 85%
complete.
North West Shelf
Greater Western
Flank-A
(Australia)
16.67%
LNG
400
To maintain LNG plant
throughput from the North
West Shelf operations.
Project approved by all joint
venture partners in
December 2011.
Worsley Efficiency & Growth
(Australia)
86%
Alumina
2,995
1.1 million tpa of additional
alumina.
On revised schedule. The
overall project is 94%
complete. Marradong mine
has been commissioned and
is ramping up to expected
capacity.
WAIO Jimblebar Mine
Expansion
(Australia)
96%
Iron Ore
3,300
Increases mining and
processing capacity to 35
million tpa with incremental
debottlenecking opportunities
to 55 million tpa.
On schedule. The overall
project is 21% complete.
Petroleum projects
Minerals projects
22
Extracted from BHP Billiton News Release 02/12, 18 January 2012.
Fair Work Act Review – BHP Billiton Submission – 17 February 2012
Page 24
Project and ownership
Share of
approved
capex (US$m)
Production capacity (100%)
Quarterly progress
WAIO Port Hedland Inner
Harbour Expansion
(Australia)
85%
Iron Ore
1,900
Increases total inner harbour
capacity to 220 million tpa with
debottlenecking opportunities
to 240 million tpa.
On schedule. The overall
project is 42% complete.
WAIO Port Blending and Rail
Yard Facilities
(Australia)
85%
Iron Ore
1,400
Optimises resource and
enhances efficiency across the
WAIO supply chain.
On schedule. The overall
project is 13% complete.
WAIO Orebody 24
(Australia)
85%
Iron Ore
698
Maintains iron ore production
output from the Newman Joint
Venture operations.
Approval announced.
Daunia
(Australia)
50%
Metallurgical Coal
800
Greenfield mine development
with capacity to produce 4.5
million tpa of export
metallurgical coal.
On schedule. The overall
project is 27% complete.
Broadmeadow Life
Extension
(Australia)
50%
Metallurgical Coal
450
Increases productive capacity
by 0.4 million tpa and extends
life of the mine by 21 years.
On schedule. The overall
project is 56% complete.
Hay Point Stage Three
Expansion
(Australia)
50%
Metallurgical Coal
1,250
Increase port capacity from 44
million tpa to 55 million tpa and
reduces storm vulnerability.
On schedule. The overall
project is 36% complete.
Caval Ridge
(Australia)
50%
Metallurgical Coal
2,100
Greenfield mine development
and expansion of the Peak
Downs Mine with capacity to
produce 8.0 million tpa of
export metallurgical coal.
Approval announced.
RX1 Project
(Australia)
100%
Energy Coal
400
Increases run-of-mine thermal
coal production by
approximately 4 million tpa.
On schedule. The overall
project is 62% complete.
First production is now
expected in H2 CY12.
Newcastle Third Port
Project Stage 3
(Australia)
35.5%
Energy Coal
367
Increases total coal terminal
capacity from 53 million tpa to
66 million tpa.
On schedule. The overall
project is 12% complete.